EUR/USD Rebound Hinges on Treasury Yields Staying Below 5%

The EUR/USD pair rebounded on Thursday after falling to a seven-week low earlier in the week. The euro slipped to 1.1460 in early Asian trading, but recovered as oil prices dropped and U.S. Treasury yields moved away from their highs.

U.S. Treasury yields have been driving the dollar's strength, and a return of yields above 5% could send EUR/USD back through 1.1460. The pair is still hovering near levels last seen on July 31.

The Fed raised its benchmark rate by 25 basis points to a 3.75-4.00% range on Wednesday, with Chairman Kevin Warsh stating that the hike removed 'a dose of accommodation' and that inflation has been too high for too long.